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ABC ALERT – Congress Approves Health Care Reforms

March 21, 2010

Late March 21, 2010, the U.S. House of Representatives approved the Senate version of health care reform by a vote of 219 - 212.

The President will likely sign the bill into law on March 23, 2010. The House of Representatives also approved, by a vote of 220 – 211, a package of changes to the Senate bill under a process called reconciliation. The Senate must now approve the House changes to the Senate bill. At this point it is uncertain if the Senate will approve the reconciliation package. Below is a summary of key provisions of the health care reform and reconciliation bills.

Reimbursement

Medicare Physician Payment The health care reform legislation does not address Medicare physician payment reform in the near or long term. It does not stop the 21.2 percent Medicare reimbursement cut slated to take effect May 1, 2010, due to mandated adjustments under Medicare's sustainable growth rate (SGR) formula. This means that unless Congress acts soon to address Medicare payment, reimbursement for each service billed under the Medicare program will be cut by 21.2 percent effective May 1, 2010.

Equipment Utilization

The House reconciliation package would set the equipment utilization rate assumption (the amount of time Medicare assumes imaging equipment is in use during the hours a practice is open for business) at 75 percent. While worse than the Senate bill provision of 60 percent, this is still better than CMS' current assumption of 90 percent. This provision applies to the advanced imaging modalities of CT and MR only. Note that the higher the equipment utilization rate is set, the lesser the reimbursement per scan. The final outcome of this provision is pending until the Senate acts on the House reconciliation package.

Medicare Payment Models

The legislation creates a new Medicare Shared Savings program, beginning in January 2012, to incentivize care coordination for services delivered to Medicare beneficiaries through Medicare Part A and Part B. Eligible participants would form Accountable Care Organizations (ACOs) and be required to meet certain criteria and quality standards in order to receive incentive payments.

Center for Medicare and Medicaid Innovation

The bill creates the Center for Medicare and Medicaid Innovation to evaluate innovative payment and service delivery models to reduce costs. Examples include payment through patient-centered medical homes, contracting with groups of providers for coordinated care, and promoting access to outpatient services when possible. The development of new payment models offers an opportunity to address health care disparities by focusing on patient-centered care.

Physician Ownership

The legislation prohibits new physician-owned specialty hospitals from receiving Medicare reimbursement. The effective date is December 31, 2010. Physician-owned hospitals that have a provider agreement with Medicare as of August 1, 2010, would be grandfathered.

Medicare Program Monitoring/Reforms

The legislation creates an Independent Payment Advisory Board to propose legislative policy to slow the rate of growth in Medicare spending. The Board would not have the statutory authority to change benefits or eligibility rules, or impose cost sharing measures on beneficiaries. The first report with recommendations on reducing Medicare spending would be due to Congress by January 15, 2014. If Congress fails to act on the recommendations by August 15 of any year in which a proposal is submitted, Medicare would be required to implement the recommendations as submitted to Congress. This Board is a source of great concern among the physician community and its activities will be closely monitored.

INSURANCE REFORMS

Health Insurance Expansion

Tort Reform

Medical Malpractice The bill creates a five-year demonstration grant program for states to evaluate tort reform options. It is unclear if States will choose to participate in this initiative.

Workforce

Graduate Medical Education The legislation reallocates GME positions that are currently vacant with priority given to physician shortage areas. This applies to primary care or general surgery.

Nursing

The bill establishes a "Career Ladder" program to promote nursing career development and advancement. The bill also reauthorizes current nursing education grants and funds Public Health Service Act nursing programs.

National Health Service Corps

The bill authorizes an additional $4 billion in funding to offer scholarships and loan repayment to those who agree to provide health care in health professional shortage areas.

Scholarships for Disadvantaged Students

The legislation authorizes scholarships for disadvantaged students who commit to work in primary care in designated medically underserved areas.

Public Health Initiatives

Community Health Centers The bill would provide a total of $11 billion from FY 2011 – FY 2015 for community health centers to provide primary care in areas where economic, geographic or cultural barriers limit access to health care. This provision is included in the House reconciliation package of amendments to the Senate bill and must still be considered by the Senate. Debate in the Senate is expected to begin on March 23, 2010.

Research

Comparative Effectiveness Research The bill would replace the current administration of Comparative Effectiveness Research under the Agency for Healthcare Research and Quality and the federal coordinating council with a new institute called the Patient-Centered Outcomes Research Institute. This new institute would be a nonprofit that identifies research priorities and conducts research to compare the effectiveness of medical treatments, services and technologies.

Revenue Raising Provisions

Industry Fees The legislation includes various proposals to tax or otherwise assess fees on the insurance industry as well as medical device manufacturers and pharmaceutical manufacturers. At this time it is not known what form these fees will take, as this is an issue of contention included in the House reconciliation package changes to the Senate bill. As of this writing, the Senate bill would assess annual, industry-wide fees based on market share of certain products.

About the Association of Black Cardiologists (ABC) ABC is an international, non-profit association of health care professionals dedicated to eliminating health care disparities related to cardiovascular disease in all people of color. For more information on ABC's mission and goals, visit www.abcardio.org.